Weyerhaeuser's Q2 2026 EPS nearly doubled to $0.23 on a $71M Oregon timberland-sale gain and a tax benefit, but adjusted EBITDA fell 7.7% to $310M as weaker timber margins offset a lumber-price-driven rebound in Wood Products.
Revenue
$1.9B
-0.9% YoY
Net income
$162M
+86.2% YoY
Diluted EPS
$0.23
+91.7% YoY
Operating margin
11.9%
How WY compares with Real Estate peers
Figure
WY
Peer median
Rank
Revenue growth (YoY)
-0.9%
+6.8%
26th of 28
Operating margin
11.9%
25.4%
11th of 14
EPS growth (YoY)
+91.7%
+5.9%
2nd of 27
Rank 1 = fastest revenue growth, highest operating margin, fastest EPS growth. Peers are the other Real Estate companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
Profit nearly doubled on paper, but the underlying business earned less than a year ago
Weyerhaeuser, one of the largest private owners of US timberland and a major North American lumber and panel maker, reported second-quarter 2026 net earnings of $162 million ($0.23 per diluted share), up from $87 million ($0.12) a year earlier, on net sales of $1,867 million, down 0.9%. The headline jump is mostly not operating improvement. It comes from a $71 million gain on selling 29,000 acres of non-core Oregon timberland (for $114 million) and a $15 million income-tax benefit, compared with a $12 million tax expense a year ago. Strip those out and the picture reverses. Adjusted EBITDA, management's main yardstick (operating profit before depreciation, depletion of harvested timber, the book cost of land sold and one-off items), fell 7.7% to $310 million from $336 million. Higher lumber prices lifted the manufacturing business, but that was more than offset by weaker timber margins and a smaller land-sales quarter.
At a glance
$91 million net earnings before special items (vs $87 million): excluding the Oregon land-sale gain, profit rose only 4.6%, and all of that came from the tax line, not from operations.
Wood Products adjusted EBITDA $129 million, up 28% (vs $101 million): lumber sold for 12% more per unit ($508 vs $454 per thousand board feet), outweighing a 9% drop in lumber volume and a 14% slide in OSB prices.
Timberlands adjusted EBITDA $123 million, down 19% (vs $152 million): lower Western log prices, a smaller Southern harvest and higher fuel and freight costs squeezed the steadier timber segment.
The numbers
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
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Operating margin is operating income as a share of net sales, the share of revenue left after running the business, before interest and tax. This quarter's 11.9% is flattered by the $71 million timberland-sale gain, which is booked inside operating income; without it, operating income would have been $152 million, or about 8.1% of sales, below last year's 9.4%.
Segment by segment
Weyerhaeuser reports three segments. Timberlands grows, harvests and sells logs (to outside mills and to its own mills). Strategic Land Solutions (renamed this year from "Real Estate, Energy & Natural Resources") sells land with higher-value uses, conservation easements and carbon/solar/mineral rights. Wood Products makes lumber, oriented strand board (OSB, the wood panel used for sheathing walls and roofs) and engineered wood, and runs a building-products distribution business.
Wood Products: lumber prices carried the quarter
Segment net sales were flat at $1,360 million (vs $1,357 million), but adjusted EBITDA rose to $129 million from $101 million. The 10-Q breaks down why:
Structural lumber: sales up $10 million on a 12% increase in realizations (average selling price), partly offset by a 9% drop in sales volume (1,163 vs 1,277 million board feet).
OSB: sales down $25 million on a 14% decrease in realizations ($242 vs $280 per thousand square feet), with volume up 2%.
Engineered solid section sales up $12 million on 7% more volume; engineered I-joist sales down $6 million.
Costs of sales fell $20 million, "primarily due to decreased sales volumes for structural lumber."
Management attributes the lumber price rise to supply leaving the market: "Curtailments and some permanent closures in late 2025 and into 2026, fewer European lumber imports, leaner dealer inventories and tighter freight markets contributed to the price increases." OSB is the opposite case: "product pricing has remained low as there have been fewer supply adjustments across the U.S. and Canada than the lumber sector." The industry lumber composite climbed from $470 to $513 per thousand board feet during the quarter, while the OSB composite fell from $265 to $243.
Compared with the first quarter, Wood Products adjusted EBITDA jumped from $71 million to $129 million as lumber realizations rose 15% sequentially. That improvement came despite higher unit manufacturing costs, which management partly blamed on "operational disruptions in response to transportation constraints."
Timberlands: the steady segment had the weaker quarter
Timberlands adjusted EBITDA fell to $123 million from $152 million, and segment gross margin dropped to $84 million from $113 million. Sales to outside customers declined 2% because Southern log sales volume fell 6%. Western log realizations were 2.1% lower than a year earlier ($115.27 vs $117.69 per ton), even though they rose from the first quarter. Costs of sales increased $18 million, "primarily due to increased Western sales volumes, as well as an increase in Western and Southern freight costs." Southern fee harvest (timber cut from land the company owns) was 5.96 million tons, down 4.3% from 6.22 million.
Sales to Weyerhaeuser's own mills (intersegment) fell 3% on a 10% drop in realizations. The filing says Southern log supply "remains ample," which keeps Southern sawlog prices broadly flat (down 0.3% year over year per TimberMart-South).
Strategic Land Solutions: timing, not trend
Segment adjusted EBITDA was $129 million vs $143 million. Climate Solutions sales dropped to $15 million from $56 million on fewer conservation sales, while rural Real Estate sales rose to $91 million from $72 million (21,168 acres at $4,319 per acre vs 17,233 at $4,161). Land-sale results are lumpy by nature: the first quarter included a single $94 million conservation easement.
What the headline numbers hide
The EPS jump is a land gain plus a tax swing. Of the $75 million rise in net earnings, the $71 million Oregon gain explains most of it. Excluding it, earnings before tax were $76 million, down 23% from $99 million. The reason after-tax adjusted profit still edged up is the income-tax line: a $15 million benefit this quarter vs a $12 million expense a year ago, a $27 million swing the 10-Q attributes to "a decrease in our estimated effective tax rate based on the forecasted mix of earnings between our REIT and TRSs." (As a REIT, Weyerhaeuser pays corporate tax mainly on its taxable subsidiaries, which include the Wood Products mills, so the tax charge moves with where profit is earned.)
Buybacks did almost nothing for EPS. Diluted shares were 721.9 million vs 723.9 million, a 0.3% reduction. Repurchases slowed sharply: $10 million this quarter vs $100 million a year ago.
Special items two quarters running. Timberland-sale gains of $58 million (Virginia, Q1) and $71 million (Oregon, Q2), plus a $28 million product-remediation insurance recovery in Q1, add up to $157 million of pre-tax special items so far this year. Year-to-date GAAP net earnings of $318 million compare with $168 million before special items, essentially flat against $170 million last year.
Cash conversion is healthy in the quarter, less so for the half. Operating cash flow of $399 million was about 2.5 times net earnings, helped by working capital: inventories released $54 million and payables rose $83 million. For the first half, operating cash flow was $451 million against $318 million of net earnings, but that was down from $466 million a year ago. Adjusted FAD (funds available for distribution, operating cash flow minus capital spending, excluding the Monticello plant build) was $265 million year to date, below the $303 million paid in dividends. Asset-sale proceeds ($306 million from timberland plus $22 million from the Princeton lumber mill) have helped cover the gap.
The segments moved in opposite directions. Wood Products (commodity-price driven) added $28 million of adjusted EBITDA while Timberlands and Strategic Land Solutions together lost $43 million, and unallocated costs rose $11 million, mainly from an $8 million larger charge for eliminating intersegment profit in inventory and LIFO accounting.
Guidance moved up slightly. Full-year Strategic Land Solutions adjusted EBITDA guidance was raised by $25 million to about $450 million. 2026 capital spending is still guided at $400-450 million, excluding about $300 million for the new Monticello, Arkansas engineered-wood plant, which is due to start operating in 2027.
Takeaway: Weyerhaeuser's doubled EPS is almost entirely a land-sale gain and a tax benefit. Underlying adjusted EBITDA fell 7.7%, and pre-tax earnings before special items fell 23%. The one real operating improvement is lumber pricing, which lifted Wood Products EBITDA 28% even as volumes shrank, so the second half depends more on lumber prices holding than on housing volume.
Outlook
Management's third-quarter guidance, by segment:
Timberlands: earnings and adjusted EBITDA "slightly higher" than Q2, on higher Western and Southern harvests and slightly lower per-unit log and haul costs, with Western realizations slightly lower overall due to mix.
Strategic Land Solutions: adjusted EBITDA about $45 million lower than Q2 (roughly $84 million) because of the timing and mix of real-estate sales. The full-year target is about $450 million, with $322 million already booked in the first half.
Wood Products: "slightly lower" than Q2 before any change in lumber and OSB prices, with higher lumber volumes, moderately higher log costs and higher OSB manufacturing costs.
The demand backdrop in the filing is soft. Q2 housing starts averaged 1.3 million units at an annual rate, down 5.0% from Q1, and single-family starts were down 4.5% to 902,000. Mortgage rates were 6.5%, and repair-and-remodel spending rose only 1.1% from Q1. CEO Devin Stockfish said the company is "encouraged by the recent increase in pricing for lumber and western logs" while citing "ongoing macroeconomic uncertainty and near-term inflationary pressures."
Our read: With starts falling, the Q2 lumber recovery rests on supply cuts (mill closures, fewer European imports), not stronger demand. That kind of price support can last while capacity stays offline, but it is fragile if demand weakens further. The composite was $513 at quarter-end against a quarterly average of $490, which gives Wood Products some price carry into Q3. Timberlands should recover a little on seasonal volume. The larger question is cash: dividends are running ahead of year-to-date Adjusted FAD, and timberland sales have been filling the gap. Watch whether Q3 Adjusted FAD catches up, and whether OSB prices, still 14% below last year, stabilize.